discountsmili.blogg.se

To audit their existing maintenance department in order to compare it to international best practice. The company wanted to know how this was going to affect their maintenance strategy and the following tasks were requested: A Experience had led to the feeling that each line could operate continuously for about 4 weeks before coming out, for two shifts, for maintenance. The problem the company faced was that they wanted to increase their output by using the weekends for production and by operating each line for as long as possible. In practice, however, fixed prices are difficult to achieve for widely traded commodity feedstocks and hence the impact on project economics of variable (often formula) based pricing will have to be carefully assessed through rigorous economic analysis.

Many of the petrochemicals projects in the Middle East have been successfully financed on the basis of low, fixed price ethane feedstock. Ideally the feedstock supply arrangements to a project should be based on a long-term fixed feedstock price. This means that the feedstock cost will have to be highly competitive. The cyclicality of the industry means that lenders to a petrochemicals project financing will want to ensure that the project can demonstrate economic viability even when the product revenues are at historically low levels. Secondly, the risks associated with feedstock prices are also high due to the cyclical nature of the industry and the fact that numerous factors can influence prices in the short term. Given that most of these supplies will be supplied on a dedicated basis, project finance lenders will spend a considerable amount of time assessing the underlying risks to which their project is exposed. In these cases the petrochemical project will be taking the long-term performance risk of the underlying project that supplies the feedstock. Many petrochemicals plants also source the basic petrochemical building blocks directly from producers. Feedstocks from refineries continue to provide a significant proportion of feedstocks to the petrochemicals industry. Ethane, propane and heavier components from gas processing facilities have, for instance, driven the development of some of the largest new integrated petrochemicals plants in the Middle East. The petrochemicals industry has been able to profitably process a wide range of different feedstocks. Firstly, volume risks are typically higher for petrochemicals projects due to the fact that petrochemical processes usually rely on upstream processing facilities which need to supply high specification feedstock. In common with other projects, raw material supply risk can be broadly divided into volume and price risk. It is not surprising, therefore, that the risks associated with raw material supply are often the most important risks in the petrochemicals sector. The cost of raw materials strongly influences the cost competitiveness of a project.

The availability and cost of raw materials for petrochemicals production is probably the most important factor in determining the success of the project. Clews, in Project Finance for the International Petroleum Industry, 2016 11.3.2 Feedstock Supply Risks